(Adds investor comment in paragraphs 9-10, updates prices) * Argentine bonds fall, peso slips amid market volatility * US support package details remain scant * Trump will not 'waste our time' with Argentina if Milei's party does not win midterms By Rodrigo Campos NEW YORK, Oct 14 (Reuters) – Argentine stocks turned sharply lower and bonds ended in the red on Tuesday after U.S. President Donald Trump said his support for the South American nation hinges on President Javier Milei's party doing well in midterm elections later this month. "We're not going to waste our time" on Argentina if Milei's party doesn't win the October 26 legislative election, Trump said. Bonds had opened sharply higher in anticipation of specifics on a support plan under discussion for weeks, but details were scant in Trump's press brief, held beside Treasury Secretary Scott Bessent and other officials. Bessent said U.S. support, including direct peso purchases and an announced $20 billion swap with Argentina's central bank, was not subject to Argentina closing a swap arrangement with China. "The American assistance is not predicated on the swap with China being closed," he said. On Tuesday, local stocks, already down over 20% this year, ended 2% weaker after rising 2%, while equities traded in U.S. exchanges fell 5.7%. The peso pared losses to close 0.6% weaker at 1,355 per dollar after strengthening over 5% on Monday. Argentina's 2035 dollar-denominated bond fell 2 cents to 57.75 cents on the dollar, with bonds maturing between 2029 and 2046 each down 1.7 cents or more according to LSEG data. For some investors, however, the conditionality was already implied and Tuesday's statements do not alter the landscape. "The United States has already demonstrated its support for Argentina through last week's (foreign exchange) intervention," said Shamaila Khan, head of fixed income for emerging markets and Asia Pacific at UBS. U.S. backing, she said, is "contingent on Argentina maintaining its current macroeconomic policies, so no new developments were announced and therefore our (bullish) view is not altered." Weeks of declines in Argentine bonds and stocks, along with increased pressure on the peso, have eroded Milei's popularity ahead of the vote later this month. The U.S. backing was not expected to directly translate into more votes for Milei's party, yet it is seen as a positive that allows the government to regain the narrative it had lost to a string of corruption and narcotics scandals. Last week, Argentine assets shot higher after Bessent said the U.S. had bought pesos in the open market to support the currency, and that the framework for a $20 billion swap with the Argentine central bank (BCRA) was in place. Details of the swap, timeline, amount allocated for any other FX purchases and whether there will be more, are still unknown. Milei has hinted the U.S. could buy Argentine debt in the primary and secondary markets, but the lack of specifics has injected volatility into Argentine assets. (Reporting by Rodrigo Campos in New York; editing by Alexandra Hudson, Lisa Shumaker, Nick Zieminski and Richard Chang)
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